NexCen Brands has announced that it will sell all of its franchise businesses, including The Athlete’s Foot, and then propose to dissolve and distribute any remaining proceeds to its shareholders. An investment firm, Levine Leichtman Capital Partners, is buying the whole business for $112.5 million through a subsidiary, Global Franchise Group. Global Franchise Group will oversee all the brands as a single business from its base in Norcross, Georgia, retaining NexCen’s existing management and personnel.

This is fourth time that TAF is changing hands since seven years ago, when it was divested by the French Rallye group, parent company of Go Sport and Courir. NexCen, formerly called Aether Holdings, acquired the athletic footwear chain in 2006 for $51.5 million in cash and $9.5 million in shares. It then added many other franchising operations in other sectors. There were 535 TAF stores in operation in the U.S. and 35 other countries the end of 2009, mostly run on a franchise basis.

The other NexCen brands involved in the transaction include Great American Cookies, MaggieMoo’s, Marble Slab Creamery, Pretelmaker and Pretzel Time. The acquisition also encompasses NexCen’s franchise management operations and a manufacturing facility, both in Georgia. Other banners in Global Franchise Group’s portfolio include Beef ‘O’Brady’s and Wetzel’s Pretzels.

NexCen’s stockholders still have to approve the deal, which should close in the third quarter of this year. NexCen will use a portion of the proceeds from the divestiture to pay off outstanding debt with its principal lender.

NexCen first started looking for strategic alternatives in February as sales were falling. It faced a liquidity crisis after purchasing Great American Cookies in 2008 for $93.7 million, and has already overhauled management and restructured its debt as a result.

NexCen had net debt of $136.5 million at the end of the first quarter, but continued to generate cash. Its net revenues declined by 16 percent to $10.0 million in the period but operating profit remained largely stable at $1.7 million. As of March 31, it had 1,706 franchised locations.